Let's start with the first factor of housing bubble for today.  The number one biggest driver of the housing bubble is speculators' speculation. Don't you ever wonder why home prices in the GTA are so high? If you think about housing prices here, one of the reasons why house prices are so high in the GTA is because of those speculators. Speculators buy properties not to live in or rent out, but to sell quickly and at high prices to make huge profits. A simple example is the fact that realtors have lots of houses in the GTA at a time when it is difficult for many Ontarians to buy a house! When speculation causes people to feel that home prices will rise indefinitely, this can lead to a bubble as people continue to buy homes at increasingly high prices for an investment purpose.

The same has been happening in the Greater Toronto Area (GTA) for a long time now. Speculators are banking on the fact that their home values ​​will continue to rise. One of the reasons Canadian homes are so expensive is because of speculators' valuation practices. The Canadian government comes up with various control measures to prevent this (such as the previous foreign buyer tax increase and the current higher tax on earnings over two hundred and fifty thousand) from time to time, however, they easily find flaws in the government's efforts, and it is difficult to completely control or prevent it. Yes, many immigrants have come and are coming to Canada, and they all prefer to settle in the GTA. Everyone in the GTA needs a house to have a roof over their head and raise their family for sure . Because of this the GTA housing market is heating up by the day. It cannot always be hot, and it needs to be cooled. The housing bubble created by this fever will one day burst, and it must burst to control the unruly real estate market. Honestly speaking,  many people want to see this market crash so they can afford to buy a house! And it's also true that the current housing situation is worse than a housing crash. However, this should not be an accident because its consequences are beyond imagination. (I'll talk about the second factor in the housing bubble in my next post!)